China Consumer Cheap but unloved – stay selective while waiting for the earnings floor; top picks Nongfu, Anta, Guming

Research evidence excerpt

China Consumer Cheap but unloved – stay selective while waiting for the earnings floor; top picks Nongfu, Anta, Guming

J P M O R G A N Asia Pacific Equity Research

29 May 2026

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China Consumer

Cheap but unloved – stay selective while waiting for the

earnings floor; top picks Nongfu, Anta, Guming

The MSCI China Consumer weight (including autos and e-commerce) has Consumer

ACdeclined to 29% from 40% at end-2020 after a ~50% price drawdown. Many Jessie Xu

investors started 2026 looking for a clean “turn”, but momentum faded again after (852) 2800-8590

Chinese New Year. Consumer Staples and Discretionary now trade at ~16x and jessie.j.xu@jpmorgan.com

~13x forward P/E (around 1.5 STD below the 10-year average - Figure 3China/HKconsumerstaples-tradingat16xforwardP/E,1.5STDbelow10-yearmean). J.P.MorganMorganBrokingSecurities(Hong (AsiaKong)Pacific)LimitedLimited/ J.P.

Valuations are undeniably “cheap”: beverage, beer, catering, sportswear, beauty

Sylvia Hu

and jewelry sit in the bottom decile of their 10-year ranges (Figure 4CurentP/Emultiplevs10Yrange–Beverage,ber,condiments,catering,sportswear,beauty,jewelryandtextileOEMaretradinginthebotomdecileoftheirrespective10Yvaluationranges), with 5-7% (86-21) 6106-6284

dividend yields. However, EPS downgrades need to bottom before a durable re- sylvia.hu@jpmorgan.com

rating can take hold. We advise focusing on names with limited downside and SAC Registration Number: S1730526010001

earlier earnings stabilization.